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"It doesn't have to be this way": Cities brace for more pain as lawmakers clash over COVID relief bill

Time running out to pass more COVID relief
Time running out to pass more COVID relief 15:33

Washington — With Congress still stuck at an impasse over a new coronavirus relief bill, America's mayors are warning the fiscal landscape in their cities is becoming dire, with withered revenue streams forcing them to take an ax to emergency services and leaving them braced for further budget woes next year.

"It's a national emergency and it requires a national response," Bill Peduto, the mayor of Pittsburgh, told CBS News. "At a time when cities and larger townships are being asked to be on the front line of response to a global pandemic, and those same areas are being faced with additional costs and less revenue because of it, the last thing they should have to face is the dysfunctional politics of Washington."

For months, governors and mayors have been pleading with Congress to provide them with federal assistance, but aid to localities has become a sticking point in negotiations between Democrats and Republicans over a relief measure. As a result, mayors confronting a plunge in sales tax revenue, with businesses and restaurants shuttered or scaling back their operations, have been forced to lay off public workers, cut department budgets and shelve plans to improve infrastructure.

Now nine months into the pandemic, as infections surge to new highs and states reimpose restrictions to mitigate the spread of the virus, the continued inaction from Congress is exacerbating the existing financial strains.

"We were enjoying the greatest economic prosperity in our community's history when the pandemic hit in March, having to make very tough decisions," Jeff Williams, the mayor of Arlington, Texas, told CBS News. 

In Arlington, cuts were imposed across every department, including its police and fire departments, and there is a hiring freeze in place, Williams said. Across North Texas more broadly, he said all cities have been forced to implement budget cuts, with some furloughing or laying off workers and others cutting back on their capital improvements.

"That's really a hard thing to do right now because of low interest rates and construction costs coming down," Williams said. "It is the exact time you need to be repairing your infrastructure, from streets to utilities and so forth. Some in our region have had no choice but to cut that back."

And Williams is not expecting the financial constraints will ease any time soon. He's bracing for property tax revenues to take a hit in 2021 as land and business values decrease, also a consequence of the pandemic.

"There is another big budget cut that is probably coming too because of that," he said.

In Pittsburgh, the city saw nearly $100 million less in revenue out of a $600 million budget, Peduto said. The city hasn't hired new workers since the spring and eliminated all open positions, on top of 10% across-the-board cuts in non-personnel. It also used a surplus built since 2014 to avoid layoffs. 

For 2021, Peduto said the city made more cuts across every department and has frozen wages for all non-union employees. But officials will face a reckoning without federal relief by July 1, when they will be forced to cut 634 employees out of a workforce of 4,000. The biggest hit, he said, would be to public safety, as more than half of those positions come from police, fire and emergency medical services.

"When Republicans in the Senate say they're not going to give any type of assistance to cities, what they're basically saying is they're going to lay off police officers across the country," Peduto said.

In Dayton, 102 city employees agreed to take voluntary separation, which helps with future savings, though the city is planning not to have new police or fire classes in 2021 unless federal aid comes, Mayor Nan Whaley said. Like in North Texas, the western Ohio city cut capital expenditures.

Whaley said the city has maintained delivery of services, but said she is worried that is not sustainable.

"It's going to be painful," she told CBS News. "And it doesn't have to be this way if we had federal help."

Optimism that lawmakers would reach an agreement on an aid package for struggling workers, businesses and state and local governments surged last week after a bipartisan, bicameral group of lawmakers rolled out a $908 billion proposal responding to the coronavirus crisis, a welcome indication of progress with negotiations between the White House and Democratic leaders stalled for weeks.

The framework included $160 billion for state, local and tribal governments, a priority for Democrats. It also included liability protections for businesses, key for Republicans, "as the basis for good faith negotiations."

Word of the agreement buoyed mayors' hopes that relief would be on the horizon, though Whaley said the wildcard is President Trump, who she said is "so disoriented from reality." The president has repeatedly opposed aid to localities, arguing federal assistance would amount to a bailout for blue states he believes have mismanaged their finances.

The U.S. Conference of Mayors has been pushing for $250 billion in federal aid for cities of all cities, but Tom Cochran, its CEO and executive director, said the group supports the inclusion of $160 billion in the bipartisan plan.

"Given the dramatic surge of the coronavirus, it is important that Congress pass a pandemic relief bill now and that aid to state and local governments is included," he said in a statement to CBS News. "Our hope is that the bipartisan group of senators currently working on a rescue package can craft a comprehensive proposal that can pass the Congress."

But again, state and local aid and a liability shield have proven to be hurdles to an agreement, with Senate Majority Leader Mitch McConnell suggesting Tuesday that they should be dropped from any package outright for the time being.

"What I recommend is we set aside liability and set aside state and local and pass those things that we can agree on, knowing full well we'll be back at this after the first of the year," McConnell told reporters. "We can't leave without doing a COVID bill, the country needs it."

But Peduto, the Pittsburgh mayor, said any recovery measure from Congress at this stage in the pandemic must cover individuals who are affected, small businesses and local governments on the front line of the pandemic.

"All three need to be taken care of in order to be able to get us through and be able to do what is right and shelter us through a pandemic," he said. "I can't imagine what next year will be like."

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